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Attorney General Asks FERC to put Public Interest Ahead of Private Power Interests in the Delivery of Electricity Through the ISO Power Grid

Friday, May 25, 2001

Contact: (415) 703-5837, agpressoffice@doj.ca.gov

(SACRAMENTO) – Attorney General Bill Lockyer has asked the Federal Energy Regulatory Commission (FERC) to put the public interest ahead of private power generator interests in the delivery of electricity through the power grid managed by the California Independent System Operator.

The Attorney General is seeking reconsideration of FERC's April 6 order requiring that all purchasers of electricity be "creditworthy" which blocked the ability of the California Independent System Operator to protect the reliability of the power grid and keep power flowing to customers of Pacific Gas & Electric and Southern California Edison. Energy generators had asked for the emergency ruling after PG&E and SCE fell behind in paying skyrocketing price tags for electricity. To avoid immediate blackouts and destabilizing the power grid, the California Department of Water Resources has assumed the role of creditworthy purchaser.

"Despite the State's efforts to secure electricity for its citizens, there are limits to what can be done," the Attorney General told FERC. "DWR cannot purchase energy at any price. The fiscal impact of having no choice but to succumb to the generators' blackmail has become apparent with the State being put on credit watch and having its credit rating lowered."

"It contravenes all reason and decency to elevate the financial interests of generators above the preservation of public health, safety and welfare," the Attorney General added in asking FERC to reconsider its ruling. "The lives and livelihood of each Californian must be made paramount to concerns of whether the generators have a profit of 50% versus 150%."

The Attorney General supported arguments made by the California Independent System Operator, which also is seeking reversal of the FERC order. The Attorney General contends FERC exceeded its jurisdiction by requiring creditworthy purchasers for emergency dispatches and the FERC order places the financial interests of the generators ahead of the interests of the public, compromising the principal responsibility of the California Independent System Operator.